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Study: Large Variation in Cost of Giving Birth at Calif. Hospitals

The cost of giving birth in a California hospital can vary by tens of thousands of dollars, and the cost differences cannot be explained by market factors, according to a study published Thursday in the journal BMJ Open, Bloomberg reports (Chen, Bloomberg, 1/16).

Study details

For the study, researchers from UC-San Francisco examined data on 110,000 births in California (Aliferis, "State of Health," KQED, 1/16).

They looked at three variables that could potentially affect the cost of the birth:

Patient characteristics, such as the mother's age;

Hospital characteristics, such as whether the hospital was a for-profit or not-for-profit facility; and

Market factors, such as the cost of living (Bloomberg, 1/16).

Findings

The study found that charges in California for:

Vaginal delivery without complications ranged from $3,296 to $37,227; and

The report noted that patient and hospital characteristics and market factors could explain only 35% of variation in pricing, adding that the cost variations were "largely random."

Renee Hsia, the study's lead author and an associate professor at the UCSF School of Medicine, said such price variations likely are present throughout the country.

Reaction

Anne McLeod, senior vice president of health policy for the California Hospital Association, said the study has a "major flaw" because it used prices before rates were negotiated between hospitals and insurers.

Because negotiated pricing information is not publicly available, researchers used a discount estimate of 37% based on an analysis that compared hospital receipts with charges and reported a similarly significant variation in pricing.

McLeod said the study "created a broad-based estimate and it's not indicative of how the actual price is agreed upon."

In addition, CHA spokesperson Jan Emerson-Shea said, "One of the big reasons for high charges is because Medicare and Medicaid significantly underpay hospitals, so part of your premium makes up for the fact that Medicare and Medicaid don't pay their fair share," adding, "These advocates never talk about the fact that the government is the biggest cause for overall high charges."

However, Anthony Wright of Health Access California called the pricing "insane," adding that individuals who sign up for plans with high deductibles under the Affordable Care Act and those who remain uninsured will be "stuck with a bill that is huge" (Bloomberg, 1/16).

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